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Part 3 - Funding policy

3.1 Improvements in pay and conditions are to be funded from within existing budgets, without the redirection of program funding.

3.1 Funding from within agency budgets

3.1.1 It is Australian Government policy that agencies may not enter into arrangements which cannot be met from within existing agency budgets.

3.1.2 Therefore improvements in pay and conditions will be funded from within existing agency budget allocations for the life of an enterprise agreement or other Workplace Arrangement.

3.1.3 In determining appropriate remuneration levels in their workplace arrangements, agencies should take into account any approved funding increases, including annual indexation, the application of all efficiency dividends, and the flow on costs to accrued leave entitlements. As noted under Part
2.1, agencies are required to provide a signed declaration covering remuneration and funding policy which can be located at Attachment D.

3.1.4 To ensure an accurate assessment of the cost impact of workplace arrangements agencies should seek to assess any potential increases in costs from the flexibility clause and from the implementation of any incomplete reviews of terms and conditions contained within the agreement.

No redirection of program funding

3.1.5 Agencies are required to complete the funding declaration (Attachment D) certifying that improvements in wages, terms and conditions have not been met by the redirection of program funding. Agencies are not to assign funding from agency programs and initiatives to fund improvements in employee
terms and conditions.

Affordability of proposed remuneration improvements

3.1.6 APS agencies proposing new or varied enterprise agreements or collective determinations which have a NED to NED AAWI in excess of 3.0 per cent will be subject to enhanced scrutiny by Finance in relation to affordability.

3.1.7 The APSC will advise Finance when it receives a proposed enterprise agreement or collective determination which exceeds the NED to NED AAWI parameters. Finance will assess proposed agreements for consistency with these requirements and will advise agencies as to the information it requires on
a case by case basis.

Affordability and approval by the Special Minister of State for the Public Service and Integrity

3.1.8 Any new or varied enterprise agreements or new collective determinations proposing a NED-NED AAWI in excess of 3.0 per cent which have not met Finance scrutiny cannot be approved by the Special Minister of State for the Public Service and Integrity.

Connect with APSC

The Australian Public Service Commission (APSC) is a central agency within the Prime Minister and Cabinet portfolio. The Commission supports two statutory office holders: the Australian Public Service Commissioner - who is also agency head - and the Merit Protection Commissioner. Their functions are set out in sections 41(1) and 50(1), respectively, of the Public Service Act 1999.